Denver's land development community can breathe a sigh of relief as the city's average plan review time has been slashed by almost half since November 2022, after experiencing a worsening situation since the pandemic. Thanks to the city's hiring efforts and a slower construction pipeline, commercial project plan review times have dropped from seven weeks in November 2022 to almost four weeks in April 2023, while residential construction review times have also plummeted from an average of 16 weeks to around eight weeks, as confirmed by Laura Swartz, a spokesperson for Denver Community Planning and Development.
Denver Development Suffered A Complicated Situation
During the pandemic, permit processing times in Denver significantly increased due to various reasons. The city attributed the delays to a shortage of workforce caused by vacant positions, resulting in reduced productivity. According to Swartz, CPD had around 50 unfilled positions out of nearly 300 total staff from March 2020 to April 2022. This high vacancy rate of nearly 18% was one of the highest among all city departments, resulting in fewer personnel available for conducting efficient and thorough plan reviews.
In addition, there was a sudden boom and interest in the residential construction sector where homeowners sought to remodel, rebuild, and add to their homes. The number of applications came in droves, overwhelming the reviewers.
On the other side of things, commercial construction slowed down due to the uncertainties and fallout of the pandemic. Building material volatility, rising property values, and in recent times interest rate hikes. All of these factors have made it difficult for land development companies to navigate and confirm if their projects were feasible. On top of all of that, specifically building in Denver became an extensive and drawn-out process. The lengthened permit times made it strenuous for developers to determine if the added time would be worth the cost. Steps towards Due Diligence and creating a worthy development team became all the more vital. Raptor Civil Engineering saw to it all of its clients would get a clear concise picture of a project’s feasibility.
The end result of these factors for the city, however, became a growing permit backlog.
Despite construction woes, Denver needs land developers
Developers often face significant challenges when dealing with permit backlogs, as these can cause construction timelines to be delayed and introduce uncertainty into their pro formas. In recent years, this issue has become increasingly acute due to the rapid escalation of construction costs, which means that even a delay of just a few weeks can add a substantial amount to a project's overall cost. Pushing that aside, developers still seek to build multifamily and multi-use projects in Denver. Something that Denver residents are in need of.
It is reported that Denver developers completed approximately 9,400 units in 2022, a similar number to that of 2021. Currently, developers have over 31,900 units in various stages of construction, and another 132,000 in the permitting process. The average cost per unit increased by 10.7% year-over-year to about $336k.
Permit Times have gone down but more needs to be done
According to a Bisnow event on April 13, Denver's Deputy Mayor Laura Aldrete stated that the city is exploring ways to expedite certain permits. For example, permits for adaptive reuse projects that repurpose unused office spaces may be fast-tracked through the entitlement process. City officials are also exploring ways to be more innovative with building codes related to outdated elements such as egress and fire.
According to Swartz, the department has initiated a new practice where zoning inspectors can make administrative modifications to projects while on-site. Previously, zoning inspectors would notify developers of any code violations and require them to undergo the design review process again. This new approach enables on-site resolution of such issues, streamlining the construction process and keeping it on track.
Land developers do not have to rely entirely on the city to fix the system that is causing delays. They can take steps to ensure that their project will be as close to perfect on paper as possible when navigating through the permit approval and plan review process. Raptor Civil Engineering has been making waves throughout Colorado’s construction industry for its attention to detail and a higher level of communication. This combined with a group of professionals whose experience will help guide a project from its pre-conception to permit-ready plans. Learn more about the current permit and development landscape from Raptor and see what can be done to get your project started.